Le catastrophe! A hated leader. Violent protests. Wealth creators Fleeing abroad. After a year of socialism, France’s meltdown is a stark warning to anyone who wants Red Ed as PM

Even in May 1968, when strikes and student protests paralysed the country and forced President de Gaulle to flee to a military base in Germany, the regime enjoyed higher approval ratings than does beleaguered President Francois Hollande today.

According to the latest poll, no fewer than 74 per cent of French voters disapprove of the leader whom they elected less than a year ago. Never mind de Gaulle; these are figures that would have alarmed Louis XVI.

Mr Hollande inherited an over-taxed, over-regulated, sclerotic France, and systematically set out to make all its problems worse

Now, as during the run-up to the French Revolution, angry observers contrast a dramatically declining economy with the wealth of some high officials. Now, as then, there have been angry clashes between rioters and security forces.

President Hollande stood for office on a populist Left-wing platform, but his administration turns out to have more than its share of millionaires, and stories persist about ministers having foreign slush funds.

Sleaze

Just as French people were scandalised by the supposed affairs of Louis’s queen, Marie Antoinette, so they now pore over magazine reports about Hollande’s mistress, Valerie Trierweiler, who is involved in a lawsuit over claims in a book that she had an adulterous affair with Hollande and another married man while she herself was married.

How did it all go so wrong so quickly? How, having won office promising an end to the sleaze of the Sarkozy era, has Mr Hollande contrived to make his countrymen nostalgic for his little predecessor — and even his supermodel wife Carla Bruni?

The short answer, as usual, is the economy. Mr Hollande inherited an over-taxed, over-regulated, sclerotic France, and systematically set out to make all its problems worse.

Riot police are pictured near Paris last month as a last ditch protest by workers to save a Goodyear plant that employs 1,200 staff descended into violence

Nicolas Sarkozy had bequeathed a country where the State already accounted for more than half the economy; where legislation provided for a maximum working week of 35 hours; and where social and employment costs were among the highest in Europe.

Only 40 per cent of French people were in employment of any kind, as against 60 per cent of Swiss. More days were being lost through industrial action than in any other EU state: 27 days per thousand people per year, as opposed to 3.4 days in Germany.

Hollande’s mistress, Valerie Trierweiler, who is involved in a lawsuit over claims in a book that she had an adulterous affair with Hollande and another married man while she herself was married

Virtually anywhere else in the world, the solution would have been obvious. People would have voted for tax cuts, deregulation of business and industry, privatisation and all the other things that Britain experienced in the Eighties, and the rest of Europe in the Nineties.

But France is different. There is something known as l’exception francaise — which, broadly speaking, has come to mean a combination of cultural chauvinism, economic protectionism, generous social entitlements and big government.

In the short term, social entitlements are pleasant enough. Frenchmen prided themselves on having proper two-hour lunch breaks instead of gobbling sandwiches at their desks like British drones. The trouble is you can’t carry on indefinitely squeezing the productive part of the economy in order to expand the unproductive part — the bloated State.

The last time that France ran a budget surplus was in 1974. There was bound to come a moment when the money ran out — and that moment arrived with the credit crunch.

Instead of drawing back from the cliff-edge, the French electorate — the larger part of it, at any rate — floored the accelerator. Before he was led to the guillotine, Nicolas Sarkozy hadn’t actually delivered any economic cuts, but he had talked of the need for them, which alienated his compatriots.

France turned to uncharismatic Mr Hollande largely because he promised ‘growth not austerity’. Don’t worry, he assured voters, I can close the deficit without cuts; I’ll do it by taxing millionaires. With a sort of grumpy suspension of disbelief, people gave him their votes.

The trouble is that millionaires don’t hang around waiting to be taxed. Friendlier jurisdictions are just a Gulfstream jet flight away, and financiers can open their businesses abroad simply by opening their laptops.

Mr Hollande has contrived to make his countrymen nostalgic for his little predecessor Sarkozy – and even his supermodel wife Carla Bruni

The result of a hike in tax rates is thus often a fall in tax revenue — which means, of course, everyone else further down the financial food chain ends up paying more to cover the share of the departed plutocrats.

Thus, President Hollande’s announcement of a whopping 75 per cent top rate has, entirely predictably, prompted many entrepreneurs to flee abroad.

France’s richest man, the business magnate Bernard Arnault, is shifting his fortune to Belgium. Gerard Depardieu, the country’s greatest actor (figuratively and literally) is emigrating to Russia. There are even rumours that Sarko plans a new career in finance in — quelle horreur! — London.

That’s the thing about high tax rates: they don’t redistribute wealth, they redistribute people.

These days, you don’t need to move physically to a different tax jurisdiction. Many Frenchmen have simply shifted their assets across the border, snapping up houses in smart West London districts and opening bank accounts in Switzerland.

Rather embarrassingly for President Hollande, these Frenchmen include the man in charge of setting the budgets for everyone else — his junior finance minister, Jerome Cahuzac, who two weeks ago admitted to stashing money in a secret Swiss account.

Hapless

David Cameron couldn’t resist inviting refugees from the 75 per cent tax to establish themselves in London

The departure of the fat cats has left an even larger hole in the French national budget, which is why the hapless Mr Hollande has just announced that he must somehow raise an additional £5 billion in 2014.

The economy, which had been forecast to grow by 0.8 per cent this year, is instead growing — just — at 0.1 per cent. Unemployment has surged to 3.2 million.

France ought, on most measures, to be treated as an economic basket case in the same category as Spain or Greece. It cannot match the competitiveness of Germany, and so has difficulty sustaining membership of the single currency. And the gap is widening.

As a consequence, despite the decline in the euro exchange rate, French exports keep falling. In 2005, France had a trade surplus of 0.5 per cent of GDP; today, it has a deficit of 2.7 per cent.

Indeed, it is the only eurozone member with a consistently widening trade gap.

Habit prevents analysts from placing France in the same mental category as the stricken Mediterranean states. But for how much longer?

Having been — or at least appeared to be — the driving power in Europe along with Germany in recent years, France is suddenly teetering dangerously.

Even the French political and financial leaders best known in international circles are in trouble.

Impropriety

First, Dominique Strauss-Kahn was forced to step down as head of the International Monetary Fund after a raft of allegations over sexual impropriety. Now his replacement, Christine Lagarde, has had her Paris flat raided by police in connection with an investigation into a large payment granted to a Sarkozy supporter when she was French finance minister. For her part, Lagarde denies any wrongdoing.

It is tempting, from a British perspective, to take a certain wry pleasure in the problems of our old rivals. And, indeed, David Cameron couldn’t resist inviting refugees from the 75 per cent tax to establish themselves in London — an invitation many are taking up.

Miliband, who like Hollande has opposed every single spending reduction, has openly praised the French president

But, before you sneer, consider that our deficit is 6.3 per cent to France’s 4.8 per cent.

Consider, too, that Labour is promising precisely the same policies as Mr Hollande’s socialists. Ed Miliband could hardly be more gushing in his praise for the French leader, claiming that his ‘new leadership is sorely needed as Europe seeks to escape from austerity, and it matters to Britain’.

Labour, as with the French socialists when they were in opposition, has opposed every single spending reduction, yet remains ahead in the opinion polls.

I hope that in Britain we will hold ourselves to a higher standard than French voters. If nothing else, we have their example to serve as a warning.

La vie en rose has become life in the red. France has run out of credit and out of options.

You can evade reality, but you can’t evade the consequences of evading reality.